Home Loan Guidelines|
by Sam Pestimi
It is quite easy to own a home these days with the help ofa
home loan plan that is available in the market. Make sure
you have all the details for a specific home loan plan in
your mind before you go for it. Awake yourself from your
ignorant world by asking yourself some hard- hitting
Would you prefer a variable or fixed rate loan? Variable
rate loans can generally be applied to every case. don't be
general, because the interest rate may vary during the
repayment peroid according to the ever-changing policies of
the fiscal companies.
What's the motive of the floating rate? The lender sets the
lending rate in which the floating rates are in relation
to. The interest rate will usually contain a regular
"extension" to the PLR (Prime Lending Rate).
Another question you can ask is, "How often is the peg
changed?" Be sure that your PLR is not constantly changed.
Discuss with your lender if you have any doubts.
For the whole term of the loan; is there a fixed rate? a
"reset" clause that provides the lender with the right to
revise the interest rate low or high once in 3 or 5 years.
Do I have a substitute opportunity? Be sure whether you
have any option to swap the loan plans or not? Are there
confines on pre-payment? There may be some restrictions on
the number of payments you are paying to the lender, even
if you want to pay more. Is there a capture charge? In
case, if some new lender or the rival company is issuing
your pay checks to repay the loans, then there is capture
or takeover fee will be charged by the old lender.
Is there any other hidden charges? You must be aware of
other small visible or invisible charges that can make a
hole in your pocket. These are like processing fee, late
charges, administrative fee, and sanction fee.
May I have a look at the loan agreement? Be sure that you
know what you are going to sign on. Though this loan
agreement documentation is spread over many pages but
you can~t afford to ignore it. So First read every single
line, you sign on.Even after following all these
guidelines, if you feel suspicion, then Discuss it with the
manager or other knowlegable person. Just be clear about
every single detail.
Finally, when in doubt, protest. If you find any revision
in interest rates or changes in the terms of your loan,
immediately get in touch with your home loan company to
clarify the issue.
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